Bull Note Keeps NVDA Moving Higher

Nvidia is eyeing its best close since April

by Josh Selway

Published on Oct 7, 2019 at 10:47 AM

The shares of Nvidia Corporation (NASDAQ:NVDA) are trading up 2.5% this morning at $186.61 after RBC's price-target hike to $217 from $190, which was based off the firm's bullish view of NVDA's gaming and data center businesses. The chip stock has now jumped more than 18% in the past three months and is pacing for its highest close since April.

Options traders have been riding the positive price action in Nvidia stock, betting for more upside momentum. For instance, the 10-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 2.53, and ranks in the top quartile of the annual range. So not only have long calls more than doubled long puts in the past two weeks, but this rate of call buying is rather rare.

Peak open interest is at the front-month October 200 call, while the October 180 call is also home to heavy open interest. Those with long positions at these strikes could benefit from positive headlines around the U.S.-China trade talks this week, as NVDA stock has been one of the more sensitive names to trade negotiations.

Another big name receiving analyst attention this morning is Apple Inc. (NASDAQ:AAPL), which obviously will be sensitive to trade talks, as well. Instinet this morning lifted its price target to $205 from $185, though this is below the stock's current price of $227.80. The shares have soared higher in recent weeks on positive iPhone rumors.

Not even an hour into the session, AAPL options traders are already active. New positions are opening at the weekly 10/11 227.50-strike call, where speculators are taking aim at the tech giant before the contracts expire at the close this Friday. From a broader view, peak front-month open interest actually belongs to the October 210 put, while the October 225 strike is most popular on the call side.

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